The fallout from the sale on Friday of Ziff Davis Enterprise to online marketing and lead-gen company QuinStreet is beginning to take shape, and apparently it’s severe. Sources with direct knowledge of the transaction told Folio: Monday that as many as 30 people were let go immediately on Friday and that in the coming weeks, a total of 100 ZDE employees will be cut from a workforce of 120 people.
The larger group will help transition the ZDE assets and ongoing business operations to QuinStreet, and then depart.
QuinStreet has declined to comment on specific aspects of the deal. "We are very excited about Ziff Davis Enterprise and the addition of great brands and editorial talent to our b-to-b efforts. We are pleased to provide these folks and assets a digital home and business model that works, and on which we can all expand into the future. It is our general policy not to grant interviews to individual outlets in M&A," a spokesperson told Folio:.
Given the size of the cuts, it’s hard to see what QuinStreet has in mind for ZDE’s brands, because content-based operations require content creators.
The sale was announced to the company in a conference call by ZDE CEO Steve Weitzner on Friday, and little explanation was given to the staff. "He did not say why the company was sold, just that it was happening that day," said a source.
Out of the executive management team, only CFO Michael Caruso is staying on for a short transition period. Weitzner is leaving the company.
The positions being carried forward, according to the source, are a mix of editorial, sales and some marketing. "It’s an odd mix, at least in my mind."
The way the deal is structured, QuinStreet is acquiring the brand assets, not the people. Accordingly, there is a significant amount of business that needs to be tied up before brands such as eWeek, CIOInsight and Baseline can be incorporated into their new owners.
"Both companies are committed to doing right by their customers and there’s obviously a lot of business in transit that can’t just be chucked over the wall to QuinStreet," said a second source. "It’s kind of a funny deal, initially there were a lot of folks who were not brought on board to QuinStreet but are continuing to be Ziff Davis Enterprise employees with various responsibilities for facilitating the transition."